UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
| [X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2019
or
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number: 1-14310
GLASSBRIDGE ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 41-1838504 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
411 East 57th Street, Suite 1-A New York, New York (Address of principal executive offices) |
10022 (Zip Code) |
(212) 220-3300
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
Preferred Stock Purchase Rights
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one).
| Large accelerated filer | [ ] | Accelerated filer | [ ] | |
| Non-accelerated filer | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company | [X] |
| Emerging growth company | [ ] |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
Aggregate market value of voting and non-voting stock of the registrant held by non-affiliates of the registrant, based on the closing price of $62.00 as reported on the OTCQB on June 28, 2019 (the last business day of the registrant’s most recently completed second fiscal quarter), was $1.0 million.
The number of shares outstanding of the registrant’s common stock on March 31, 2020 was 25,170.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
GlassBridge Enterprises, Inc. (“GlassBridge”) is filing this Amendment to Annual Report on Form 10-K (this “Amendment No. 1”) to amend the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (File Number 001-14310) (the “Form 10-K”) as filed by GlassBridge with the U.S. Securities and Exchange Commission (the “SEC”) on April 3, 2020. The principal purpose of this Amendment is to include in Part III the information that was to be incorporated by reference from the proxy statement for GlassBridge’s 2020 Annual Meeting of Stockholders. This Amendment No. 1 hereby amends the cover page and Parts III and IV of the Form 10-K. In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by GlassBridge’s principal executive officer and principal financial officer are filed as exhibits to this Amendment No. 1.
This Amendment No. 1 does not modify or update the other disclosures presented in the Form 10-K. Except as expressly provided herein, this Amendment No. 1 does not reflect events occurring after the filing of the original Form 10-K (i.e., those events occurring after April 3, 2020) or modify or update those disclosures that may be affected by subsequent events. Accordingly, this Amendment No. 1 should be read in conjunction with the Form 10-K and GlassBridge’s other filings with the SEC.
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GLASSBRIDGE ENTERPRISES, INC.
2019 ANNUAL REPORT ON FORM 10-K/A (Amendment No. 1)
TABLE OF CONTENTS
| Page | ||
| PART III | ||
| ITEM 10 | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | 3 |
| ITEM 11 | EXECUTIVE COMPENSATION | 5 |
| ITEM 12 | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS | 9 |
| ITEM 13 | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE | 11 |
| ITEM 14 | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 13 |
| PART IV | ||
| ITEM 15 | EXHIBITS | 14 |
| SIGNATURES | 19 | |
BASIS OF PRESENTATION
As used in this document, the terms “GlassBridge”, “the Company”, “we”, “us”, and “our” mean GlassBridge Enterprises, Inc. and its subsidiaries and consolidated entities unless the context indicates otherwise.
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Item 10. Directors, Executive Officers and Corporate Governance.
BOARD OF DIRECTORS
Our Board of Directors (the “Board of Directors” of “Board”) is currently composed of four directors divided into three classes with one Class I director serving until the 2021 Annual General Meeting, two Class II directors serving until the 2020 Annual General Meeting and one Class III director serving until the 2020 Annual General Meeting. The members of each class are generally elected to serve three-year terms with the term of office of each class ending in successive years.
| Joseph A. De Perio | Joseph A. De Perio, age 41, is the Chairman of the Board of Directors. Mr. De Perio joined our Board on May 20, 2015. On March 22, 2017, the Board appointed Joseph De Perio to serve as its Chairman and as the Company’s principal executive officer, effective on the same day. Previously, Mr. De Perio served as the Board’s Non-Executive Chairman. Mr. De Perio served as a Senior Portfolio Manager of Clinton Relational Opportunity Master Fund, L.P. from October 2010 to December 2018; he also served in a similar capacity from 2006 until December 2007. From December 2007 until October 2010, Mr. De Perio was a Vice President at Millennium Management, L.L.C., a global investment management firm. Mr. De Perio was a Private Equity Associate at Trimaran Capital Partners, a private investment firm, from 2004 until 2006 and an analyst and associate in the mergers and acquisitions department at CIBC Oppenheimer, a national investment boutique, from 2000 until 2004. Mr. De Perio served on the board of directors of Viking Systems, Inc., a leading worldwide developer, manufacturer and marketer of 3D and 2D visualization solutions for complex minimally invasive surgery, from June 2011 until its sale to Conmed Corporation in October 2012, and Overland Storage, Inc. (f/k/a Overland Data, Inc.), a provider of data protection appliances, from April 2011 until its sale to Sphere 3D Corporation in December 2014. Mr. De Perio also served on the board of directors of EveryWare Global, Inc., a provider of tabletop and food preparation products for the consumer and foodservice markets, from May 2013 until April 2015 when the company filed for protection under Chapter 11 of the United States Bankruptcy Code pursuant to a pre-packaged plan of reorganization. Mr. De Perio received a B.A. in business economics and organizational behavior management with honors from Brown University. | |
| Robert G. Torricelli | Robert G. Torricelli, age 68, joined our Board on February 27, 2017. Mr. Torricelli served in the U.S. House of Representatives from the Ninth District of New Jersey from 1982 until his election to the U.S. Senate in 1996, where he served until 2003. During his tenure in the Senate, Mr. Torricelli was a member of the Senate Finance, Governmental Affairs, Foreign Relations, Judiciary and Rules Committees and also served as Chair of the Democratic Senatorial Campaign Committee. Upon retiring from the Senate, Mr. Torricelli established a national and international business strategy firm, Rosemont Associates LLC, and created a real estate development business, Woodrose Properties LLC.
Mr. Torricelli brings to our board extensive leadership and strategic business experience. | |
| Robert Searing | Robert Searing, age 71, joined our Board on August 26, 2015. Mr. Searing has been the Chief Operating Officer and the Chief Financial Officer of BH Asset Management, LLC, a Registered Investment Advisory firm, since January 2010. From 2003 to 2009, he was the Chief Operating Officer of Schottenfeld Group, LLC, an investment advisory and broker dealer firm. Mr. Searing is also a Certified Public Accountant. | |
| Mr. Searing brings to our Board his experience as a financial leader with significant depth and breadth of knowledge in dealing with complex financial and accounting matters as well as broad managerial expertise | ||
| Alex Spiro | Alex Spiro, age 35, joined our Board on August 26, 2015. Mr. Spiro has been a partner at Quinn Emanuel Urquhart & Sullivan LLP since October 2017. Prior to that, Mr. Spiro had been an attorney at Brafman and Associates in New York City since July 2013. In that position, Mr. Spiro has handled an array of complex litigation and investigations. Prior to his joining Brafman and Associates, from September 2008 to July 2013, Mr. Spiro worked as a Manhattan prosecutor. Mr. Spiro formerly was the director of an autism children’s program at McLean Hospital, Harvard’s psychiatric hospital. Mr. Spiro is a graduate of the Harvard Law School where he remains on the adjunct faculty. He has lectured and written on a variety of subjects related to psychology and the law. | |
| Mr. Spiro brings to our Board his significant analytical and overall business leadership skills. |
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OUR EXECUTIVE OFFICERS
The following table provides information regarding our executive officers as of April 30, 2019.
| Officer | Age | Position | ||
| Joseph A. De Perio | 41 | Chairman and principal executive officer | ||
| Daniel A. Strauss | 35 | Chief Executive Officer | ||
| Francis Ruchalski | 56 | Chief Financial Officer |
Joseph A. De Perio, age 41, is the Chairman of the Board of Directors. Mr. De Perio joined our Board on May 20, 2015. On March 22, 2017, the Board appointed Joseph De Perio to serve as its Chairman and as the Company’s principal executive officer, effective on the same day. Previously, Mr. De Perio served as the Board’s Non-Executive Chairman. Mr. De Perio served as a Senior Portfolio Manager of Clinton Relational Opportunity Master Fund, L.P. from October 2010 to December 2018; he also served in a similar capacity from 2006 until December 2007. From December 2007 until October 2010, Mr. De Perio was a Vice President at Millennium Management, L.L.C., a global investment management firm. Mr. De Perio was a Private Equity Associate at Trimaran Capital Partners, a private investment firm, from 2004 until 2006 and an analyst and associate in the mergers and acquisitions department at CIBC Oppenheimer, a national investment boutique, from 2000 until 2004. Mr. De Perio served on the board of directors of Viking Systems, Inc., a leading worldwide developer, manufacturer and marketer of 3D and 2D visualization solutions for complex minimally invasive surgery, from June 2011 until its sale to Conmed Corporation in October 2012, and Overland Storage, Inc. (f/k/a Overland Data, Inc.), a provider of data protection appliances, from April 2011 until its sale to Sphere 3D Corporation in December 2014. Mr. De Perio also served on the board of directors of EveryWare Global, Inc., a provider of tabletop and food preparation products for the consumer and foodservice markets, from May 2013 until April 2015 when the company filed for protection under Chapter 11 of the United States Bankruptcy Code pursuant to a pre-packaged plan of reorganization. Mr. De Perio received a B.A. in business economics and organizational behavior management with honors from Brown University.
Daniel A. Strauss, age 35, is our Chief Executive Officer. Mr. Strauss served as our Chief Operating Officer from March 2017 through December 2019. Mr. Strauss was a Portfolio Manager at Clinton from 2010 until 2019. Mr. Strauss is currently the Chief Executive Office of Adara Enterprises, Corp. f/k/a Imation Enterprises Corp. (“Adara”) and is a member of the board of directors of Adara and Sport-BLX, Inc. (“SportBLX”). Mr. Strauss has over ten years of experience in corporate finance as a portfolio manager and investment analyst in private and public equity through which he has developed a deep understanding of corporate finance and strategic planning activities. At Clinton, Mr. Strauss was responsible for evaluating and executing private equity transactions across a range of industries. Post-investment, Mr. Strauss was responsible for the ongoing management and oversight of Clinton’s portfolio investments. From 2008 to 2010, he worked for Angelo, Gordon & Co. as a member of the firm’s private equity and special situations area. Mr. Strauss was previously with Houlihan Lokey, where he focused on mergers and acquisitions from 2006 to 2008. Mr. Strauss has served on the boards of directors of Pacific Mercantile Bancorp (NASDAQ: PMBC) from August 2011 until December 2015 and Community Financial Shares, Inc. (OTC: CFIS) from December 2012 until its sale to Wintrust Financial Corporation in July 2015. Mr. Strauss received a Bachelor of Science in Finance and International Business from the Stern School of Business at New York University.
Francis Ruchalski, age 56, is our Chief Financial Officer. Mr. Ruchalski is also currently the Chief Financial Officer of Clinton and a member of its board of directors. He has been employed by Clinton since 1997. In addition, Mr. Ruchalski is the Chief Financial Officer of SportBLX, a member of its board of directors and a member of the board of directors for Adara. Prior to joining Clinton, Mr. Ruchalski was an audit manager with Anchin, Block & Anchin, LLP, a certified public accounting firm, from 1986 to 1997. Mr. Ruchalski’s responsibilities while with Anchin, Block & Anchin LLP included client auditing and financial and taxation planning. Mr. Ruchalski holds a bachelor of science in accounting from St. John’s University.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors and executive officers to file reports of ownership and changes in ownership of our common stock with the SEC. We are required to identify any of those individuals who did not file such reports on a timely basis. We believe that during 2019 all of our directors and executive officers complied with their Section 16(a) filing requirements, except that Daniel Strauss, Joseph A. De Perio, Robert Searing, Alex Spiro and Robert G. Torricelli have not reported the acquisition of stock options on September 6, 2019.
CODE OF ETHICS
We adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, and all of our other employees. Our code of ethics is part of our broader Business Conduct Policy, which is posted on the investor relations section of our website at www.glassbridge.com under the “Corporate Governance” section. If we make any amendments to our code of ethics other than technical, administrative or other non-substantive amendments, or grant any waiver, including any implicit waiver, from a provision of the code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions requiring disclosure under applicable SEC rules, we intend to disclose the nature of such amendment or waiver on our website. The information on our website is not incorporated by reference into this Amendment No. 1.
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Item 11. Executive Compensation.
Compensation of Named Executive Officers
We are a “smaller reporting company” as such term is defined in Rule 405 of the Securities Act of 1933, as amended (the “Securities Act”), and Item 10 of Regulation S-K. Accordingly, and in accordance with relevant SEC rules and guidance, we have elected, with respect to the disclosures required by Item 402 of Regulation S-K, to comply with the disclosure requirements applicable to smaller reporting companies.
Summary Compensation Table
The table below shows compensation for the last two fiscal years for our named executive officers for 2019 and 2018.
| Name and principal position | Year | Salary ($) | Bonus ($) | Bonus
Stock Awards (in $) | Option
Awards ($) | Stock Awards ($) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) | All Other Compensation | Total | |||||||||||||||||||||||||||
| Daniel Strauss(1) | 2019 | $ | 53,030 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 312,500 | 365,530 | ||||||||||||||||||||
| (Chief Executive Officer and Former Chief Operating Officer) | 2018 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | 0 | ||||||||||||||||||||
| Danny Zheng(2) | 2019 | $ | 83,393 | $ | 110,250 | $ | 0 | $ | 0 | $ | 1,500 | $ | 0 | $ | 102,325 | 297,469 | ||||||||||||||||||||
| (Former Interim Chief Executive Officer and Chief Financial Officer) | 2018 | $ | 315,000 | $ | 230,000 | $ | 0 | $ | 0 | $ | 110,250 | $ | 900 | $ | 0 | 656,150 | ||||||||||||||||||||
| Francis Ruchalski(3) | 2019 | $ | 14,583 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 80,000 | 94,583 | ||||||||||||||||||||
| (Chief Financial Officer) | 2018 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | 0 | ||||||||||||||||||||
| Joseph De Perio(4) | 2019 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | 0 | ||||||||||||||||||||
| (Chairman and Principal Executive Officer) | 2018 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | 0 | ||||||||||||||||||||
| (1) | Mr. Strauss serves as our Chief Executive Officer pursuant to the terms of an employment agreement with the Company dated December 18, 2019. Prior to entering into the employment agreement with the Company, Mr. Strauss served as our Chief Executive Officer and Chief Operating Officer pursuant to that certain Amended and Restated Services Agreement between the Company and the Clinton Group Inc. (“Clinton”), dated March 31, 2019 (the “Amended Services Agreement”), and that certain Management Services Agreement between the Company and Clinton, dated as of January 1, 2019. On December 18, 2019, Mr. Strauss amended his employment agreement with the Company’s subsidiary Andara, to provide for at-will employment at a salary of $200,000 per year. Please see Note 15 – Related Party Transactions of Notes to Consolidated Financial Statements included in the Company’s Form 10-K for year ended December 31, 2019 amended by this Amendment No. 1. | |
| (2) | Mr. Zheng resigned as an executive officer effective March 29, 2019. | |
| (3) | Mr. Ruchalski was named the Company’s Chief Financial Officer effective April 5, 2019. Mr. Ruchalski served as our Chief Financial Officer pursuant to the terms of the Amended Services Agreement. | |
| (4) | Mr. De Perio is the principal executive officer of the Company. He receives no salary for his role as principal executive officer of the Company. |
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Supplemental All Other Compensation Table
Name and principal position | Year | Perks and Other Personal Benefits ($) | Registrant Contributions to 401(k) and Non-Qualified Pension Plans | Severance Payment | ||||||||||
| Daniel Strauss | 2019 | $ | 0 | $ | 0 | $ | 0 | |||||||
| (Chief Executive Officer and Chief Operating Officer) | 2018 | $ | 0 | $ | 0 | $ | 0 | |||||||
| Danny Zheng | 2019 | $ | 0 | $ | 0 | $ | 0 | |||||||
| (Former Interim Chief Executive Officer and Chief Financial Officer) | 2018 | $ | 0 | $ | 0 | $ | 0 | |||||||
| Francis Ruchalski | 2019 | $ | 0 | $ | 0 | $ | 0 | |||||||
| (Chief Financial Officer) | 2018 | $ | 0 | $ | 0 | $ | 0 | |||||||
| Joseph De Perio | 2019 | $ | 0 | $ | 0 | $ | 0 | |||||||
| (Chairman and Principal Executive Officer) | 2018 | $ | 0 | $ | 0 | $ | 0 | |||||||
Outstanding Equity Awards at Fiscal Year-End
The following table summarizes the total outstanding equity awards as of December 31, 2019 for each of the named executive officers in the Summary Compensation Table.
| Option Awards | Stock Awards | |||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock Held That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | ||||||||||||||||
| Daniel Strauss | 428 | 332 | 106 | 09/06/2029 | 0 | 0 | ||||||||||||||||
| Joseph De Perio | 0 | 165 | 106 | 09/06/2029 | 0 | 0 | ||||||||||||||||
| Robert Searing | 0 | 145 | 106 | 09/06/2029 | 0 | 0 | ||||||||||||||||
| Alex Spiro | 0 | 145 | 106 | 09/06/2029 | 0 | 0 | ||||||||||||||||
| Robert Torricelli | 0 | 145 | 106 | 09/06/2029 | 0 | 0 | ||||||||||||||||
The description of the Company’s 2011 Equity Incentive Plan is incorporated by reference to Note 9 – Stock-Based Compensation of Notes to Consolidated Financial Statements included in the Company’s Form 10-K for year ended December 31, 2019 amended by this Amendment No. 1
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Compensation Under Retirement Plans
| Name and principal position | Plan Name | Number of Years Credited Service ($) | Present Value of Accumulated Benefit ($) | Payments During Latest Fiscal Year (in $) | ||||||||||||
| Daniel Strauss | Pension Plan | $ | 0 | $ | 0 | $ | 0 | |||||||||
| (Chief Executive Officer and Former Chief Operating Officer) | Non-qualified pension plan | $ | 0 | $ | 0 | $ | 0 | |||||||||
| Danny Zheng | 0 | $ | 2 | $ | 28,848 | $ | 0 | |||||||||
| (Former Interim Chief Executive Officer and Chief Financial Officer) | 0 | $ | 9 | $ | 1,286 | $ | 0 | |||||||||
| Francis Ruchalski | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
| (Chief Financial Officer) | 0 | $ | 0 | 0 | $ | 0 | ||||||||||
| Joseph De Perio | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
| (Chairman and Principal Executive Officer) | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||
Compensation Under Severance Plans
| Name and principal position | Base Salary ($) | Accrued Unused PTO ($) | Annual Bonus ($) | Total (in $) | ||||||||||||
| Daniel Strauss | 0 | $ | $ | 0 | $ | 0 | ||||||||||
| (Chief Executive Officer and Former Chief Operating Officer) | ||||||||||||||||
| Danny Zheng | 157,500 | $ | 36,043 | $ | 110,250 | $ | 303,7931 | |||||||||
| (Former Interim Chief Executive Officer and Chief Financial Officer) | ||||||||||||||||
| Francis Ruchalski | 0 | $ | $ | 0 | $ | 0 | ||||||||||
| (Chief Financial Officer) | ||||||||||||||||
| Joseph De Perio | 0 | $ | $ | 0 | $ | 0 | ||||||||||
| (Chairman and Principal Executive Officer) | ||||||||||||||||
On December 18, 2019, Daniel Strauss entered into an employment agreement with the Company as the Company’s Chief Executive Officer; previously he served as the Company’s Chief Executive Officer and Chief Operating Officer pursuant to that certain Management Services Agreement between the Company and Clinton, dated as of January 1, 2019. Pursuant to the employment agreement, Mr. Strauss is an at-will employee with an annual salary of $200,000 and eligible to participate in the compensation and benefit programs generally available to the Company’s executive officers. On December 18, 2019, Mr. Strauss amended his employment agreement with the Company’s subsidiary Andara to provide for at-will employment at a salary of $200,000 per year.
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COMPENSATION OF DIRECTORS
Director Compensation for 2019
The table below shows compensation for the last fiscal year for our directors in 2019.
| Name | Fees Earned or Paid in Cash ($) | Option
Awards ($)(1) | All Other Compensation ($) | Total($) | ||||||||||||
| Joseph A. De Perio | $ | 88,750 | 0 | $ | 90,000 | $ | 178,750 | |||||||||
| Robert Searing | $ | 31,250 | 0 | $ | 10,000 | $ | 41,250 | |||||||||
| Alex Spiro | $ | 21,250 | 0 | $ | 10,000 | $ | 31,250 | |||||||||
| Robert Torricelli | $ | 21,250 | 0 | $ | 10,000 | $ | 31,250 | |||||||||
| (1) | On September 6, 2019, Messr. De Perio and Messrs. Searing, Spiro and Torricelli were each awarded a stock option to purchase 165 shares and 145 shares, respectively. The aggregate number of outstanding stock options held by each director as of the last day of the fiscal year 2019 was the number of the shares awarded to such director in 2019. |
Non-employee directors receive the following compensation for service on our Board:
| ● | Annual Retainer: $21,250 |
| ● | Committee Chairman Fee: |
| ● | $10,000 per year for serving as chair of the Audit and Finance Committee |
| ● | Travel Reimbursement: We reimburse directors for travel costs of attending Board meetings, other meetings with management and interviews of Board candidates. |
The Nominating and Governance Committee reviews Board compensation every year.
In lieu of cash, non-employee directors may elect to receive all or part of their Annual Retainer, Non-Executive Chairman fee, Committee Chairman fee and meeting fees in shares of common stock or in restricted stock units equivalent to shares of common stock.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below shows the number of shares of our outstanding common stock as of April 30, 2020 held by each person that we know owns beneficially (as defined by the SEC for proxy statement purposes) more than 5% of any class of our voting stock. The beneficial ownership percentages listed below are based on 25,170 shares of common stock outstanding as of June 18, 2019.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||
| George Hall 411 East 57th Street, Suite 1-A New York, NY 10022 | 7,328 | 29.1 | % | |||||
| Ariel Investments, LLC 200 East Randolph Street, Suite 2900 Chicago, IL 60601 | 3,883 | (1) | 15.4 | % | ||||
| Wells Fargo & Company 420 Montgomery Street San Francisco, CA 94104 | 2,610 | (2) | 10.37 | % | ||||
| (1) | Information reported is based on a Schedule 13G/A filed with the SEC on February 14, 2020 by Ariel Investments, LLC (“Ariel”), an investment advisor, reporting beneficial ownership of 3,883 shares of our common stock. Of such shares, Ariel reported that it had sole voting power with respect to 0 shares and sole dispositive power with respect to 0 shares. |
| (2) | Information reported is based on a Schedule 13G/A filed with the SEC on January 28, 2020 by Wells Fargo & Company (“Wells Fargo”) on its own behalf and on behalf of its subsidiaries Wells Capital Management Incorporated (investment advisor) (“Wells Capital”), Wells Fargo Funds Management, LLC (investment advisor) (“Wells Fargo Funds”), Wells Fargo Clearing Services, LLC (broker dealer) and Wells Fargo Bank, National Association (bank). Wells Fargo reported beneficial ownership of 2,610 shares of our common stock, over which it has shared voting power with respect to 696 shares, shared dispositive power with respect to 2,609 shares and sole voting power and sole dispositive power with respect to 1 share. Wells Capital beneficially owns 2,609 shares of our common stock, over which it has shared voting power with respect to 0 shares, shared dispositive power with respect to 2,609 shares and sole voting and sole dispositive power with respect to 0 shares. Wells Fargo Funds beneficially owns 1,527 shares of our common stock, over with it has shared voting power and shared dispositive power. |
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SECURITY OWNERSHIP OF MANAGEMENT
The table below shows the number of shares of our common stock beneficially owned as of April 30, 2020 by each director, each nominated director, each officer named in the Summary Compensation Table in this proxy statement and all directors and executive officers as a group. Except as otherwise indicated, the named person has sole voting and investment powers with respect to the shares held by that person, and the shares are not subject to any pledge. The beneficial ownership percentages listed below are based on 25,170 shares of common stock outstanding as of April 30, 2020.
| Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||
| Daniel Strauss | ||||||||
| (Chief Executive Officer and Former Chief Operating Officer) | 380 | (1) | 1.48 | % | ||||
| Francis Ruchalski | ||||||||
| (Chief Financial Officer) | 0 | - | ||||||
| Joseph De Perio | ||||||||
| (Chairman and Principal Executive Officer) | 650.5 | (2) | 2.58 | % | ||||
| Robert Searing (Director) | 225.2 | (3) | * | |||||
| Alex Spiro (Director) | 381.2 | (3) | * | |||||
| Robert G. Torricelli (Director) | 354.2 | (3) | * | |||||
| All Directors and Officers as a Group (6 Persons) | 1,991.1 | (4) | 7.91 | % | ||||
* Indicates ownership of less than 1%.
| (1) | Includes 380 shares subject to a currently exercisable option. |
| (2) | Includes 27.5 shares subject to a currently exercisable option. |
| (3) | Includes 24.2 shares subject to a currently exercisable option. | |
| (4) | Includes 431.7 shares subject to currently exercisable options. |
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Item 13. Certain Relationships and Related Transactions and Director Independence.
RELATED PERSON TRANSACTIONS
The information set forth in Note 15 – Related Party Transactions of Notes to Consolidated Financial Statements included in the Company’s Form 10-K for year ended December 31, 2019 amended by this Amendment No. 1 is incorporated by reference.
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Director Independent and Determination of Audit Committee Financial Expert
Our Board of Directors concluded its review of the independence of our directors and nominees under the applicable rules of the OTCQX marketplace (“OTCQX”) in 2020. The Board made this review to determine whether any of the relationships or transactions described below, if existing, were inconsistent with a determination that the director or nominee is independent. During this review, our Board reviewed:
| ● | whether there were any transactions or relationships between each director, nominee or any member of his or her immediate family and us and our subsidiaries and affiliates; and | |
| ● | whether there were any relationships between the directors or nominees and senior management and between directors or nominees and our independent registered public accounting firm. |
None of the directors or nominees except Mr. De Perio had any material relationship with us that would interfere with their independence from management. Therefore, the Board affirmatively determined that all of the directors and nominees except Mr. De Perio are independent.
The Board also reviewed whether the Audit and Finance Committee had an audit committee financial expert as defined in the SEC rules and the OTCQX rules. The Board reviewed the skills and experience required under the rules and determined that Mr. Searing qualifies as an audit committee financial expert as defined under those rules.
Risk Oversight
Our Board has responsibility for risk oversight, focusing on our overall risk management strategy, our degree of tolerance for risk, and the steps management is taking to manage our risks. Management reports on its risk management process on a quarterly basis to the Board of Directors. The Audit and Finance Committee also receives quarterly reports on key financial risks that could affect us.
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Item 14. Principal Accountant Fees and Services.
AUDIT AND OTHER FEES AND AUDIT AND FINANCE COMMITTEE PRE-APPROVAL POLICY
Audit and Other Fees
Below is a listing of the services provided by type and amount charged to us by our independent registered public accounting firms for 2019 and 2018. During 2018, the Company dismissed its principal accountant and engaged Turner as our independent registered public accounting firm. The dismissal was approved by the Board of Directors and Audit and Finance Committee.
The reports of our principal accountant on the Company’s consolidated financial statements as of and for the for the previous two years did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principle.
During the Company’s most recent and interim periods, preceding our former accountants’ dismissal, (i) there were no disagreements between the Company and our former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of our former accountant, would have caused it to make reference to the matter in connection with its reports on the Company’s financial statements for the such years, and (ii) there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
The listing below reflects this change in our independent registered public accounting firms in fiscal years 2019 and 2018.
| Fiscal Year | Fiscal Year | |||||||
| 2019 | 2018 | |||||||
| Audit Fees: | ||||||||
| GAAP and statutory audits | $ | 89,000 | $ | 363,552 | ||||
| Audit-Related Fees: | ||||||||
| Services related to business transactions | $ | 0 | $ | 0 | ||||
| Employee benefit plan audits | $ | 0 | $ | 0 | ||||
| Attest services and other | $ | 0 | $ | 0 | ||||
| Total Audit-Related Fees | $ | 89,000 | $ | 363,552 | ||||
| Tax Fees (tax preparation, advice and consulting) | $ | 0 | $ | 9,806 | ||||
| All Other Fees: | ||||||||
| Other Business Consulting Fees | $ | 0 | $ | 12,128 | ||||
| Financial training materials | $ | 0 | $ | 0 | ||||
Audit and Finance Committee Pre-Approval Policy of Audit and Permissible Non-Audit Services
All the services provided by our independent registered public accounting firm are subject to pre-approval by the Audit and Finance Committee. The Audit and Finance Committee has authorized the Chairman of the Audit and Finance Committee to approve services by our independent registered public accounting firm in the event there is a need for approval prior to the next full Audit and Finance Committee meeting. The Chairman reports any pre-approval decisions to the Audit and Finance Committee at its next scheduled meeting.
With respect to each proposed pre-approved service, our independent registered public accounting firm provides back-up documentation as requested, including estimated fees regarding the specific services to be provided. The Audit and Finance Committee (or Chairman, as applicable) reviews the services and the estimated fees and considers whether approval of the proposed services will have a detrimental impact on our independent registered public accounting firm’s independence prior to approving any service. At least annually, a member of our management reports to the Audit and Finance Committee all audit and non-audit services performed during the previous twelve months and all fees billed by our independent registered public accounting firm for those services.
In 2019 and 2018, all audit services, audit-related services, tax services and those items described above under all other fees were pre-approved by the Audit and Finance Committee or the Chairman.
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List of Documents Filed as Part of this Report
1. Financial Statements
See Index to Consolidated Financial Statements in Item 8 of the Annual Report on Form 10-K.
2. Financial Statement Schedules
All financial statement schedules are omitted because of the absence of the conditions under which they are required or because the required information is included in the Consolidated Financial Statements or the notes thereto.
3. Exhibits
The following Exhibits are filed as part of, or incorporated by reference into, this report:
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| * | Items that are management contracts or compensatory plans or arrangements required to be filed as an exhibit pursuant to Item 15(b) of Form 10-K. |
| ** | Confidential treatment has been requested. Confidential material has been redacted. |
| † | Filed herewith |
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| GLASSBRIDGE ENTERPRISES, INC. | ||
| By: | /s/ Daniel Strauss | |
Daniel Strauss Chief Executive Officer | ||
Date: April 30, 2020
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